The price of oil has dropped about 34% since summertime, a reflection, analysts say, of abnormally warm winter weather and the growing improbability of a wider war in the Middle East.

The price of crude oil, which was below $11 a barrel in 1998, soared to a record-high in mid-July of $78.40 a barrel. Over the summer, rising oil prices caused concerns about inflation and the economy, sending stocks tumbling and gasoline prices soaring. At the time, some analysts predicted the price would surpass $100 a barrel.

Since then, however, oil prices have plummeted, falling about 15% in the first two weeks of 2006. As of close yesterday, the price of light sweet crude oil on the New York Mercantile Exchange fell below $52 a barrel, its lowest in 20 months. That may eventually translate into lower gasoline and heating oil prices for consumers, easing worries about inflation that the Federal Reserve has been considering in setting interest rates. “Since August, the price drop is one of the biggest in history,” an energy analyst for Alaron Trading Corp, Philip Flynn, said. “Basically, we have a different world than we had in August. Then, we were paranoid about the hurricane season, and concerned about a war between Israel and Hezbollah. The world was a very scary place.” In anticipation of more Hurricane Katrinas, oil imports increased and stockpiles were built up, Mr. Flynn said. When the hurricane season turned out to be a dud, “the markets started to tumble,” he said.

“I think Mother Nature feels guilty about what she did to New Orleans,” Mr. Flynn said. “Since then, she has been very friendly to oil prices. The impact of the weather has overtaken the geopolitical concerns since August,” he said.

Warm winter weather, analysts say, has sapped demand for heating oil by about a third, and supply overshooting demand has depressed prices. Yesterday, the National Oceanic and Atmospheric Administration said it expects warmer-than-normal weather in the Northern United States to continue through March, according to the Associated Press.

A senior vice president on the energy desk of Fimat, Don Luke, said the price of oil has yet to hit bottom. He said prices could soon fall below $50 a barrel but were unlikely to slide below $45.

“The psychology of the market has turned over,” Mr. Luke said yesterday. “You have a warm, warm winter and a fairly quiet political situation throughout the world between August and now. There is not a lot of concern in the marketplace.”

A senior vice president of global energy futures at Macquarie Futures USA Inc., Nauman Barakat, said it is difficult for analysts to make a bullish case for oil prices. He said the “geopolitical premium” that was prevalent six months ago has been discounted from today’s oil prices.

“Military confrontation between Iran and the U.S. — the probability of that appears to recede the more and more we get mired in the problems in Iraq,” he said.

Demand for oil is down domestically, and Mr. Barakat said the market is concerned about a slowdown of the U.S. economy.

“There is more concern about the housing sector. As the housing market goes down, so does oil,” he said. Investors, he said, are pulling their money out of oil indices, a poorly performing investment in the last year, in favor of equity markets. Furthermore, the Organization of Petroleum Exporting Countries has yet to cut back on output as it promised, propping up supply and depressing prices, Mr. Barakat said.

Analysts say factors that could reverse the trend include a run-up in demand, supply cuts from OPEC, increasing geopolitical concerns, and any interruptions of oil shipments from Iran and Nigeria.

So far, cheaper oil prices have not directly translated into cheaper gasoline prices for consumers. While gasoline prices at the pump skyrocketed over the summer, prices have yet to plummet this winter.

For every dollar the price of crude goes down, drivers could expect to see 2-2.5 cent drop in prices at the gas pump, according to the Associated Press. While the price of crude has dropped about $9 since December —which should result in a 20-cent savings a gallon — the average retail price of gasoline is only down one cent during that span.

“At this stage the consumers are definitely not benefiting from a 15% reduction in prices since the beginning of the year,” Mr. Barakat said.

Adjusted for inflation, the highest prices of crude oil were in the 1970s, when in today’s dollars prices exceeded $90.